(Alliance News) - Pendragon PLC on Thursday said that it had completed the sale of its dealership and leasing business to Lithia Motors Inc, marking the beginning of its transformation into Pinewood Technologies.
Pendragon is a Nottingham, England-based automotive dealer. In September, the company agreed to sell Pendragon NewCo 2, which holds its UK motor business and leasing business, to American automotive group Lithia Motors Inc. In December, the pair received approval from the Financial Conduct Authority for a change of control of Pendragon Finance & Insurance Services Ltd, the company's finance and insurance arm, paving the way for Thursday's disposal.
The sale involved an aggregate consideration of GBP367 million, alongside a subscription by Lithia for 279.4 million new shares at a subscription price of GBP30 million. The new shares were admitted to the main market of the London Stock Exchange on Thursday morning.
The sale followed a bidding war for the company's motor and leasing business, with proposals received from Autonation Inc, Hedin Mobility Group AG, and PAG International Ltd. Lithia increased its total consideration by GBP117 million to GBP397 million in October.
Pendragon said: "Today marks the beginning of the transformation of Pendragon into Pinewood Technologies, a pure-play software-as-a-service business, which operates the company's dealer management software business."
The deal also enters Pinewood into a strategic partnership with Lithia UK Holding Ltd, a wholly-owned subsidiary of Lithia Motors, which will roll out Pinewood in its 50 existing UK sites. The company said that the partnership will "accelerate Pinewood's entry into the highly attractive North American dealer management software market", and that this entry would be "underpinned" by the GBP30 million subscription.
Pendragon said: "The board strongly believes that the growth prospects for the company will be enhanced materially as a result of becoming a standalone business, as well as through the strategic partnership with Lithia."
In December, Pendragon said that it would be returning 24.5 pence per share to shareholders following the deal's completion by way of a special dividend. This dividend is expected to be paid in the first or second quarter of 2024.
The company also announced that the appointment of Oliver Mann as director and chief financial officer has taken effect, following the resignation of Mark Willis from the company.
Shares in Pendragon were up 0.1% at 36.40p each in London on Thursday late morning.
By Hugh Cameron, Alliance News reporter
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